Jet Corporation of Australia Pty Ltd v Petres Pty Ltd

[1985] FCA 206

CATCHWORDS

Practlce and procedure - subpoena duces tecum - inspection by

applicant of documents produced to the Court by stranger to

the proceedings - relevance of the documents to the issues

ralsed in the proceedings - rlghts of a stranger in producing hls personal documents - tlmlng of inspection premature -

whether Court should	look	at documents to determine their
relevance.

JET CORPORATION OF AUSTRALIA PTY. LIMITED

(In its capacity as Trustee of the

JET CORPORATION AUSTRALIA TRUST)

and

PETRES PTY. LIMITED

(in its own right and in its capacity	as
Trustee of the Schutt Unit	Trust) and OTHERS
V. No. G 109 of 1983
Northrop J. Melbourne 3 May 1985

IN THE FEDERAL couw OEXJSTPALIA	)
)
VICTOFTA DISTRICT REGISTRY	) V. No. G 109 of 1983
)
GENERAL D I V I S M	)
BETWEN	:

JCT CORPOTII\TION OF ?.LISTRAUA PTU. LTMITED

( m Lts capac1l;y a5 TLustcc of the

JET CORPORATION AUSTRALTA TRUST) Applicant

a n d

PET'FtES PTY. LIMITED

(in Its own right and I n lts calcaclty as

Trustee of the Schutt Unit Trusr;)

and OTYERS Respondents

CORAM:	NORTHROP J.
D m :	3 FAY 1985

PLACE : MELEOUHNE

gx T E M F O K ~ REASONS FOR JUDGMENT

Thls is the return of a motion taken out by the

appllcant seeking an order that the appllcant have leave to

inspect and take coples of the documents produced t o the

Court by Mr. Athol Lidqett of Messrs. Simon, Liclgett,

Collingwood and Co. pursuant to the subpoena for the

productlon of the said documents dated 27 June 1983. Notice

of motion	was	scrved	on all the	respondents to the
appllcatlon, and there	1 s no	appearance	by m y of	those

respondents to o ~ p c s e thc nalrirq of the clrrlec s o u g h t . Notice

of the	motlon was served. on Mr. Athol Lidgett, who has
appeared, by counsel, and who	has oblected to the grantlng of

leave to the applicant to Inspect and take coples	of	those
aocuments.

The objections can be classified as comlng wlthln

one or more of three separate headlnys: first, that the

documents, or some of them, have no relevance or apparent

relevance to any issue ralsed ln these proceedlngs; secondly,

that the documents are the personal documents of Mr. Lidqett,

who is a stranger to the lltigatlon, and the r.tghts of a

stranger in relation t o his personal documents should be protected by the Court; and thirdly, thht In any event, the

appllcatlon for inspectlon is premature and should be

postponed until the issues have been clarified by pleadings

when It will be more apparent as to what are the issues and the Court can decide whether the documents produced have suificient relevance to those issues to justliy the yranting

..

of leave to inspect them.

In support of his submissions, counsel relied upon

Small's case (1938) 38 S.R. (N.S.W.) 564 and the views

expressed by Sir Frederlck Jordan in that case in relatlon to

the practice and procedure to	be adopted In relation to	this
type cf problem, and also Waind's case	(1978) 1	N.S.M.L.R.,

partlcularly the ~udyment of the Presldenr; of the Court of

Appeal, Mr. Justice Moffatt. Counsel also urged upon me that

In accordance with views expressed In that case, the Court

should inspect the clocuments tu declde any questlan oC

relevance. Counsel also relled upon two affidavlts, one by

Mr. Ilobday sworn 3 May 1985, which refers to the €act that

durlng the course	of	last	year, the solicitors for the
aEplicant notifled the sollcltors for	Mr.	Lidqett	of the

posslbllity of Supreme Court proceedlnys belng lnstltuted bp

the appllcant In relatlon to matters common to matters

arislng In the present proceedlnqs m thls Court and

encloslng a copy or statement of claim whlch would form the basis cf that actlon in the Supreme Court. In rellancc on

this, counsel urged that thls lllustrated the problems

arlslng from the rights	of the person produclnq the documents
and the danger	of any Infringement of those rlghts where use

could be made of documents inspected in those proposed

Supreme Court proceedlnqs,	and if not direct use made of the
documents, information could	be obtalned winch could be used
In the Eranling of	the statement of claim, knowlng full well
that there were documents supporting the allegations made	as

a result of informatlon obtained from the lnspectlon of

documents In this action.

The other affldavit was by Mr. Lidqett himself

sworn on 24 April 1985, which contamed matters I n relatlon

to the possible prcductlon to the sollcltoro for the

applicant of the documents produced at an earlier stage. 1

place no rellance upon that matter since ~t seems to me I

must decide now whether leave should be qlven to inspect or not, on the way the matter has been argued and presented to me today.

In opposltion to the motion, the applicant r~lles

upon an affldavit sworn by the solicltor for the dppllcarrt

making reference to a report made by Nessrs. Siblon,	Lidqztt,
Collinqwood and Cu. and dated	23 September 1981, which ruport

shows that the flrlll, Messrs. Slmon, Lidgett, Collingwood and Co. was then actlvely engaged In relation to the creatlon of

t h e new Jet Corporation	of Australia Trust for the purposcs
of taklng over and acqulrlnq the buslness	of Schutt Avlat Lon

and other matters. A copy of that report 1 s annexed to the

affldavlt, together	with a letter which is, on the face of ~ t ,
at least, relevant	to the matters which are ralsed by the

statement of claim filed on behalf of the appllcant.

The affidavlt also dlscloses the fact that In the

opinion of Mr. Johnson, the solicitor for the applicant,
because of the unusual features of this case, it is necessary

for the applicant to inspect and take copies of the documents

produced to enable it to present its case based	on	the
statement of clalm,	and he says that it	1 s hls belief that

the applicant may only be In a position to gain a full

understanding of the facts which relate to the whole of the

actlon once it has been afforded the opportunity to inspect

and take copies of the documents. It should he noted also

that the statement of claim	does refer in partlcluar to three
of Its paragraphs to the report referred	to in the affldavit
annexed to it.

It is a l s o necessary to make reference to the

documents whlch have been made the sublect of the subpoena, and they are referred to In the Schedule to the subpoena anti

I quote:

"(a) the flrm's correspondence file, papers for, calculations prepared for and drafts of its

report dated 21st September, 1981 related to

the prolected buslncss of the flrstrlmned

Applicant TAGETHER WITH documents handed Into the possesslon of the firm In connection wlth the report.

(b)	the flrm's coirespondence file and accountlng
records 111 connectlcn wlth Its professlonal

assistance to The Jet Corporation of Australla Trust relating tc che offerlng of its unlts,

subscriptlon, sales and transfers of unlts. "

The firm referred to in the Schedule is the firm of

Messrs. Slmon, Lidgett, Colllngwood and Co. The report 1s

exhibited to the affidavit referred to a short while ago, and it also should be noted that the sale and the agreement for

sale, arlslng from the facts rcferred to In that report,

..

form the has15 of the applicatlon by the appllcant.

In my opinion, havlng regard to the statement of

claim, the documents referred to in the subpoena and the

affidavit of Mr. Johnson, there 1 s ample materlal to support the vlew that the documents so produced are relevant to the

issue ralsed by the appllcant m Its statement of claim.	In
fact, these documents appear to go to the very heart of	the

complaint made by the appllcant and it is necessary, In my

opinlon, in the interests of lustice, that the applicant is

able to 111spect those documents to enable it to present Its
case to the Court.

The quesLion arises whether the Court should, in

the exercise of Its dlscretlon to grant 1nspectlon or not,

look at those documents Itself to determine whether they are

relevant or not. On the facts of this case, and

notwlthstanding w h t has been sald	both in Waind's case and
Small's. case, it would be inapproprlate for the	Court, zt
thls stage, to	look at those documents to declde the questlon
of relevance.

In my opinion, this is not a case of a fishinq

expeditlon by the appllcant and It is a case where the

applicant is proceeding under some dlfflculties because of

the problems of obtalnlny necessary documentatlon to support

its clalm, that documentatlon being in the custody of	other
persons.

It is also apparent, from the material already

referred to, that documents	have been produced to the Court
and no objection was taken at that tlme as to the relevance

of the documents referred to in the subpoena, nor	was	any
objection then taken	as to the form	of the subpoena being In

the nature of a flshing expedition or dlscovery against a non

party.

In all the c~rcumstances, therefore, I thlnk 11: is

inapproprlate for the Court to lnspect the documents flrst

and that this is a case where, f rom other material and for

other reasons, there is sufriclent evidence to support the

view that the documents produced are relevant and do have an

apparent relevance to the issue raised by the appllcant, and

that on thls aspect of the matter the appllcant should be

granted leave to Inspect them.

At the same time it is necessary to balance aqalnst

that right of the applicant, the rights of the person who

produced the documents, M r . Lldgett. The Court must be

careful to ensure there is no unnecessary invasion of the

rlghts of that, person, the rlghts of hls prlvacy to h15

documents, and those rlghts must be balanced agalnst the

rlghts of ensurlng that justlce 1s done by the Court In

determmlng rights and	liabilities	between parties to the
ac tlon.

There is force m what was sald by counsel for MY.

Lidgett in rclatlon to the dangers of inspectlng documents

whlch could be used elsewhere, but a number of recent

decisions in England have clariiled the posltlon In relatlon

to documents which are produced in Court proceedings.

Harman’s case 1 C19831 A.C. 280, a decision of the

House of Lords, lays down stringent obliyatlons on

professlonal people and	on parties who obtain	materlal	In
Court proceedings, and	the Improper use	of	that material

otherwise than In those proceedings constitutes a contempt of

Court as being in breach of an undertahng implied by the law

not to make Improper use of documents produced pursuant to

Court pr occdures .

In the more recent case of Sybror. Cortmrntlon v.

Barclays Bank PLC. C19347 3 W.L.R. 1055 , slmllar v l e m were

expressed by Mr. Justice Scott in relatlon to documents

produced by way of subpoena.	I quote from page l0G3 of that
report:

"It is a rule established by several recent cases, to which I must later refer, tha.t documents

disclosed by a party under compulslcn of court

process, such a5 alscovery, cannot be used by the

party to whom they are thereby disclosed for any

lmprcper purpose. An implled undzrtaklng not to

use the documents for an improper purpose 1s iinposed by the court on that party. Breach of that undertaklng would represent a contempt of court:

see itolne Offlce v. Harman C19831 1 A.C. 280. A

party who desires to use such documents for

purposes outslde those for whlch they have been

disclosed ought first to seek the leave o€ the

court authorlsing such use: Halcon see

International Inc. v. shell _Tt-ansport and Tradlnq

Q. C19793 R.P.C. 9 7 . "

The Sybron Corporation case was a case where

documents had been obtamed In one proceeding and were sought

to be used in other proceedmgs. The reasoning of the Court

was that It should not be done without leave of the Court.

to the subpoena, and whlch is lnspected by the applicant or In my opinion, any document whlch has been produced pursuant its solicitor, ccinnot be used for any other purpose, apart

from the purposes of these proceedings, wlthout the leave of the Court. They have been lnspected by those persons upon,

at the very least, an implled undertaking that lmprcper use

will not be made of those documents and that, if it is, the persons who so make ImproFer U'j? m 1 1 be liable €or penalty

by way of contewpt of Court. In my oplnlon, thls is ample

protectlon to safeguard the rlghts of Mr. Lldgett, even In

. .

- 9 -

the extension of the problem sugqested by counsel for Mr.

Lidgett, that use could be made of iniormation so obtalned In

framng other Court proceedings.

Accordingly, on a balancing exercise, I need to

ensure that the applicant 1s able to properly present its

case when welghed agalnst the rights of the person answering

the subpoena, Mr. Lidgett, together with the obllgatlon

imposed upon the applicants by grantlng leave to inspect
those documents. Thls weighs 111 favour of the appllcant and,
accordingly, on thls ground of objection, I flnd In iavour of

the appllcant.

The third main ground for objection by Mr. Lidgett

was that the claim for lnspection is premature. It is sald

that the issues are not yet fully clarliled; the hearing 1 s

stlll very much In the future; that this is a matter that

..

should be deferred until much closer to the time of trial.

In my opinion, that submission also should bc

rejected. For reasons already given, it is apparent that

this is a most complex and difficult action commenced by the

applicant.	The applicant 1 s facing difflcultles In obtaining
the necessary documentation to enable	It to frame properly

its claim and that to delay further the inspectlon of

documents, which I have held are relevant, to enable

inspection to be granted now, could merely add	to problems m
the iuture where,	after inspectlon, it may be necessary to

reframe parts of the statement of clalm and parts of the

claim Itself thereby further delaylng the hearing and maklng

more difficult the general presentatlon of the case.

In my opinion, it is important that the inspection takes place as soon as practlcable to enable the appllcant to

frame Its case to enable the	Court,	in due course, to deal
with the whole	of	the applicatlon. Accordlngly, the Court

proposes to make the order sought. The Court glves leave to

the applicant to inspect and take copies	of the	documents
produced to the Court	by Mr. Athol Lldgett of Messrs.	Slmon,

Lidgett, Collingwood and Co., pursuant to the subpoena dated

27 June 1983.